Amazon And Ali Are Fully Blooming. Do They Really Think That Way?

about Amazon and Alibaba There is always an endless story. In August 10th, Forbes released the list of the world's richest in the field of science and technology. Amazon founder Jeff Bezos ranked second in the list. His 66 billion 200 million dollar net assets increased by 18 billion 400 million US dollars compared with last year. Amazon's current market value is 365 billion 600 million dollars, and its share price has risen 47% in the past year. Ma Yun, the founder of Alibaba, ranks eighth in the list of rich people, ranking one year earlier than last year. Its net worth has increased from $23 billion 200 million last year to $25 billion 800 million this year. At present, Alibaba has a market value of $229 billion, and its share price has risen 10.8% in the past year.

In August 11th, Alibaba released the second quarter of 2016 and Alibaba 2017 financial year first quarter report, revenue jumped 59% to 5 billion 20 million U.S. dollars, higher than expected, which is Alibaba's largest revenue growth since the 25 billion US dollar IPO spanaction two years ago. Last month, Amazon announced the second quarter 2016 earnings, net profit of 860 million U.S. dollars, up 832% over the same period last year, eye-catching performance.

Amazon and Alibaba revenue and net profit for the second quarter of 2016 (US $100 million)

From the point of view of revenue, Amazon was 6 times the number of Alibaba in the second quarter of 2016, and both achieved a good year-on-year growth. The former increased by 31% compared with the same period last year, and the latter increased 59% over the same period last year. Amazon's revenue growth is mainly due to AWS cloud. business With the strong growth and the growth of subscribers of AmazonPrime services, the main driving force of Alibaba's revenue growth comes from the sustained and rapid growth of China's retail platform revenue, as well as the merger of Youku potatoes and Southeast Asian e-commerce platform Lazada.

From the net profit point of view, Alibaba surpassed Amazon, but Ali's net profit still dropped by 77%, mainly due to the stripping of Ali pictures. From the third quarter of 2015, after the completion of financing by Ali pictures, Alibaba rejected Ali pictures. Although Amazon has only $860 million in profit, it is already the most profitable quarter in its history, and it is very inspiring for investors.

If we look at the volume of spanactions, Alibaba's trading volume is much higher than that of Amazon. In 2015, Amazon's trading volume was $225 billion 600 million and Alibaba was US $398 billion, because the two models were different. Ali's Taobao and Tmall belong to the open platform mode, and Amazon is mainly self operated mode. In the 2016 second quarter, Ali's total volume of Tmall and Taobao continued to maintain steady growth, of which Taobao grew 19% over the same period last year, reaching 76 billion 510 million US dollars; Tmall grew 33.7%, reaching 49 billion 550 million US dollars, while Amazon did not publish spanaction data in the second quarter. In addition, it is worth mentioning that Ali's liquidity rate at the mobile terminal exceeded the non mobile terminal liquidation rate for the first time, which is regarded as an important milestone by Alibaba.

E-commerce business is still the core of Amazon and Ali

Amazon's net revenue of electronics and other daily necessities in the second quarter of 2016 was $21 billion 970 million, up 34% from the same period last year, accounting for 72% of total revenue. In the fifth consecutive profitable quarter of Amazon, the international electricity supplier business in addition to North America still has a $135 million operating loss, but the loss has narrowed considerably compared with the 189 million US dollar loss in the same period last year.

Nearly 85% of Ali's total revenue comes from the electricity business, including China's retail platform, international trade retail business, China's trade wholesale business and international trade wholesale business. The revenue in the second quarter was $4 billion 100 million, an increase of 47% over the previous quarter, accounting for 84.7% of the total revenue of Ali, while the revenue of China's retail platform (Taobao, Tmall, Juhuasuan) was 3 billion 520 million US dollars, up 49% over the same period last year.

AWS revenue is 15 times the income of Ali cloud, but the latter is leading faster.

Amazon's net revenue from AWS in the second quarter of 2016 was $2 billion 890 million, up 58.2% from the same period last year, accounting for 9.5% of total revenue. The operating profit from AWS was 720 million US dollars, up 136% over the same period last year. Cloud service is undoubtedly the biggest highlight of Amazon's performance in recent years. At present, Amazon's operating profit from cloud service business has exceeded its operating profit in North America's e-commerce business, and it is also the fastest growing business in all Amazon business. Cloud services have become an engine for Amazon's growth and an important source of investor confidence in Amazon.

Alibaba's net revenue from aliyun in the second quarter of 2016 was $190 million, an increase of 156% over the same period last year, accounting for 3.9% of total revenue and a loss of 67 million US dollars. Cloud computing is emerging as a new business of Alibaba. The growth of the total number of paid users has become a strong driving force for growth of Alibaba. Ali cloud is currently competing fiercely with us brands such as AWS and Microsoft Azure.

According to the above data, we can see that Amazon's current cloud computing revenue is 15 times that of Ali cloud, but Ali cloud's growth rate is ahead.

Ali's revenue in digital media and entertainment business is less than Amazon, but the growth rate is amazing.

Amazon's net revenue from the media business in the second quarter of 2016 was $5 billion 210 million, up 10.5% from the same period last year, accounting for 17.1% of the total revenue.

Alibaba 2016 revenue growth in the second quarter of 59%, but in fact, Ali's core business electricity business revenue grew by only 47%, dragging heavily behind, and "entertainment" was good performance, an increase of 286%, accounting for 9.8%. However, the business is still burning money, with a loss of $280 million. Ali "Da Wen entertainment" was officially set up in June 15th, which covers the Alibaba group of Alibaba group, Youyi potato group, Ali music, Ali sports, UC, Ali game, Ali literature and digital entertainment division.

Like the cloud computing business, Amazon is also ahead of Ali in digital media and entertainment business, but Ali's growth in this business is quite alarming.

Other businesses blossom in full blossom.

In addition to the traditional electricity business and new cloud services, Amazon is gradually building a content centered ecosystem through its Prime members' derivative services and a series of hardware products. At present, the Amazon Prime member who has an annual fee of $99 enjoys a series of privileges. Besides enjoying 2 days' free arrival, he can enjoy movies, TV and music on Amazon platform. Prime membership services have been extended to 11 countries. Prime members are a big weapon that Amazon is different from other e-commerce sites. Data show that Prime members purchase more than two times the amount of ordinary users.

Ali continues to make progress in innovation projects, including YunOS operating system, High German map, nails and so on. YunOS7 released the first Internet car with SAIC in early April. In other investment businesses, Alibaba group affiliate rookie network can handle 42 million packages per day in the second quarter. The joint venture between Ali and ant gold clothing and "word of mouth" to provide local life services, reached $4 billion 670 million through the settlement of Alipay in the second quarter, an increase of 48% over the previous quarter.

Amazon and Alibaba are all based on electricity providers, but the current business development has gone beyond the scope of the electricity supplier and is moving towards the all direction technology companies. With the full blossom of the new businesses such as cloud computing and digital media, the competition between the two will be intensified.